New York City considers giving yellow cabs surge-pricing capability

With the yellow cab industry teetering on the brink of insolvency, New York City is poised to roll out what its top taxi regulator called a “tremendous opportunity.”

Later this month, the Taxi and Limousine Commission will unveil a pilot program allowing some yellow and green cab drivers to use surge pricing and to offer up-front cost estimates, like their counterparts Uber and Lyft already can.

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Right now, the commission requires yellow and green taxi drivers to charge passengers the rate determined by the meter housed on the taxi's dashboard. The pilot program would allow yellow taxi drivers to depart from those strictures, provided they are responding to a pick-up request from a pre-approved yellow taxi app, like Arro or Curb.

“It’s an opportunity for taxis to have a bigger presence in that smartphone arena,” TLC Commissioner Meera Joshi said in a recent interview.

Joshi’s Taxi and Limousine Commission has hinted at the coming proposal twice in the past few weeks. In a Feb. 27 letter to NYC Taxi News publisher and yellow medallion owner Abe Mittleman, a commission attorney rejected Mittleman's request to put fare decals back on the exterior of taxi cabs, citing the Commission's exploration of "flexible fare structures, which may eliminate the need for fare decals."

In a subsequent interview with NY1, Joshi previewed the second half of the upcoming proposal, dealing with up-front price quotes.

“A lot of what passengers like, is they like that certainty,” she said. “I know the ride’s going to be $17. A taxi can’t offer you that today. But through the apps that work in the taxis, we’re going to give them the flexibility to be able to pre-calculate and give the customer an upfront binding fare. So they can make a decision.”

In a subsequent interview with POLITICO, Joshi tied the two strings together.

The pilot proposal, on which she hopes to hold a vote later this month, would allow the participants in New York City’s e-hail program — which allows yellow and green taxis to pick up customers via certain apps — to allow both up-front fare estimates and variable, or surge, pricing.

“That flexibility will allow them to do pricing somewhat like the apps do, that reacts to need," Joshi said.

Whether the e-hail companies, or yellow taxi drivers, will avail themselves of this new opportunity remains to be seen.

Yellow medallion owner Carolyn Protz said the proposal was a "diversion" from the larger issue — the dramatic rise in for-hire vehicles on city streets.

"[The Taxi and Limousine Commission] needs to get the excess cars off the road, period," she said.

Arro, one of the e-hail apps that yellow and green drivers can use, has differentiated itself from Uber by touting its lack of surge pricing.

“The meter has been an important tool to be transparent to the passenger, knowing exactly how much they’re paying for a taxi ride,” said Arro spokesman Michael Woloz, referring to the yellow taxi meter. “There’s just nothing hidden about it.”